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Return on shareholders' equity indicates the percent of corporate earnings for each dollar of total equity invested in the corporation, whereas the earnings-price ratio reflects the percentage earned for
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Return on shareholders' equity indicates the percent of corporate earnings for each dollar of total equity invested in the corporation, whereas the earnings-price ratio reflects the percentage earned for each dollar of Multiple choice question. preferred stock. retained earnings. average total stockholders' equity. market value of common stock.

User Masud
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14 votes
14 votes

Answer:

market value of common stock.

Step-by-step explanation:

The formula for earnings-price ratio is as follow

Earnings-price ratio = Earning Per share / Market value per share

This ratio determines the percentage of earnings as compared to each dollar of equity investment.

In this ratio, the equity investment is the market value of the share.

Hence the correct option is "market value of common stock."

User Kiyoko
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